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Selected information for ABC Company for the past two years appears below: Year 1 Residual income ..................... $3,750 Variable costs ...................... 25% of sales Fixed
Selected information for ABC Company for the past two years appears below: Year 1 Residual income ..................... $3,750 Variable costs ...................... 25% of sales Fixed costs ......................... $172,500 Minimum required rate of return ..... 9% Year 2 Residual income ..................... $74,000 Variable costs ......................60% of sales Fixed costs ......................... $110,000 Minimum required rate of return .....16% Turnover ............................ 5 The margin in year 2 was three times larger than the margin in year 1. Calculate ABC Company's return on investment (ROI) for year 2. Enter your answer as a number (i.e., 40). Do not enter your answer as a decimal (i.e., .40). Also, do not put the % symbol after your answer.
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